The U.K. plans to expand its probe into 21st Century Fox Inc.'s bid for pay-TV broadcaster Sky Plc, exposing Rupert Murdoch and his family to further scrutiny over governance at their media empire and adding to the uncertainty about the 11.7 billion-pound ($15.5 billion) deal.
Culture Secretary Karen Bradley is inclined to ask the Competition and Markets Authority to conduct a months-long investigation into Fox's commitment to broadcasting standards, in addition to a widely expected CMA review over whether the deal would give the Murdochs too much influence over U.K. media, she said Tuesday in Parliament.
The scope of the planned CMA referral surprised investors, given Bradley had said after an initial review she planned follow the advice of communications regulator Ofcom and confine any further inquiry to questions of the Murdochs' media influence, rather than their conduct. Shares of Sky fell as much as 5.1 percent, the biggest drop since the U.K.'s June 2016 vote to leave the European Union.
Clinching the rest of 39 percent-owned Sky would give Murdoch control of one of the most powerful pay-TV distribution platforms in Europe. A tie-up would also broaden Fox's revenue streams, increase its geographic diversity and bolster its portfolio of drama and sports content.
Fox Chief Executive Officer James Murdoch and fellow managers now face the prospect of months of interrogation over recent events at scandal-hit Fox News and past corporate governance failings at Murdoch media outlets. Wrongdoing at News Corp.'s U.K. newspapers scuppered a 2010 attempt to buy the rest of Sky, while this time, sexual- and racial-harassment allegations at Fox News have given opponents ammunition to slow a deal that initially appeared on track to sail through.